Five Things You Need to Know to Start Your Day
China is reportedly considering delays to its “Made in 2025” program. Theresa May survives efforts to oust her as U.K. prime minister. And Thursday is filled with central-bank decisions in Europe. Here are some of the things people in markets are talking about.
May Survives, for Now
Theresa May survived an attempt to oust her as U.K. prime minister on Wednesday, but the size of the rebellion against her weakens her position at a critical time as she tries to steer the U.K. out of the European Union. Conservative Party members of Parliament backed her by 200 to 117 in the secret ballot. May’s enemies can’t try again to oust her as party leader for at least a year, but the result shows that more than one in three of her own colleagues do not want her to be prime minister. In an emotional concession during a private meeting with her critics, she said she knew deep down she would not be leading them into the next election in 2022, according to people in the room. The pound held its gains as Asian stocks headed for a muted start to trading.
Made in 2035?
China is considering plans to delay some targets in its strategy to dominate high-end technologies and focus instead on shaping industry standards, according to two people familiar with the matter. Beijing may postpone some aspects of its ambitious industrial program by a decade, according to the people, who spoke on the condition of anonymity. The program that Chinese officials call “ Made in China 2025,” which cites advancements in robotics, aerospace and renewable energy, has been one of the main targets in President Donald Trump’s trade war. Separately, Citigroup economists said the trade-war damage to China's economy is already done.
More on Huawei
Commerce Secretary Wilbur Ross cautioned against assuming Donald Trump will stop the extradition of a Huawei Technologies Inc. executive arrested in Canada, and said the president hasn’t yet decided to intervene in a case that’s roiled trade talks between Washington and Beijing. “Let’s see what he actually decides,” Ross told reporters at the White House. Trump said in an interview with Reuters on Tuesday that he would intervene in the U.S. effort to extradite Huawei chief financial officer Meng Wanzhou if it would help him win a trade deal with China, but that move would not be without consequences. The trouble for Huawei may mean opportunity for Samsung, though. There's also the case of Michael Kovrig, the former Canadian diplomat who has been detained by China's spy agency.
Super Thursday Rundown
By the time Mario Draghi declares an end to 2.6 trillion euros ($3 trillion) of stimulus on Thursday, his central bank and four others nearby will have delivered their own final decisions of 2018 in a volley of announcements almost every hour. Starting with the world’s lowest interest rate from the Swiss National Bank, and then later, the region’s two highest central bank benchmarks in Ukraine and Turkey, officials setting the cost of borrowing are likely to focus on the shape of policy in 2019 against a backdrop of shaky global growth. That’s likely to be a focus of questions to the European Central Bank president too.
Avoiding the Tax Man
Wealthy Chinese are rushing to shelter assets and income in overseas trusts before new tax rules go into effect next month, including provisions that target offshore holdings. The Bank of Singapore has seen a 35 percent surge in Chinese clients interested in offshore trusts since the second half of 2018, according to Woon Shiu Lee, head of wealth planning at the bank. The rate of inquiries leading to the establishment of a trust, which offers “tax-planning opportunities” by giving ownership to third-party trustees, has doubled since August, he said. The reforms, which take effect Jan. 1, are meant to reduce the tax burden on lower-and middle-income people by making the rich pay more.
What we've been reading
This is what’s caught our eye over the last 24 hours.
- Ditching the U.S. dollar is a popular call for 2019.
- It's been a tough week for Narendra Modi.
- Tencent Music climbed in its U.S. trading debut.
- A Southeast Asian currency is set to top 2018's emerging-market list.
- “What Is Bitcoin?" topped Google's 2018 list of most-searched definitions.
- Saudi Arabia is shipping 6,000 tons of shrimp a week to China.
- The best books of the year.
©2018 Bloomberg L.P.